Bitcoin is once again knocking on the door of price exploration, but researchers at Bitwise Asset Management argue that spot quotes still underestimate the network's value. In the Crypto Market Compass Week 24 released late Tuesday, Dr. André Dragosch, Head of European Research at Bitwise, and analyst Ayush Tripathi calculated that “quantitative models estimate the 'fair value' implied of Bitcoin in the context of current sovereign default probabilities at around $230,000 today.” This figure implies a premium of just over 110 percent compared to the market price, which is hovering near $109,600 at the time of press on June 11, 2025.

The true value of Bitcoin is exploding

Dragosch links that assessment to the rally in country risk hedges. The one-year U.S. credit default swap spread is trading near half a percentage point—the level last seen during the debt ceiling scare of 2023—reflecting “broader concerns about the U.S. fiscal deficit,” Reuters reported last week.

“Bitcoin can provide an alternative 'portfolio insurance' against widespread sovereign default as a decentralized, scarce asset with no counterparty risk,” the note argues, adding that net interest costs expected by the Congressional Budget Office will triple the U.S. debt service costs to around $3 trillion by 2030.

However, the macro backdrop is not the only pillar supporting Bitwise's fair value call. The firm's internal crypto asset sentiment index shows twelve of fifteen market breadth measures trending upward, while the cross-asset risk appetite index (CARA) compiled from stocks, credit, interest rates, and commodities has surged to a five-year high.

Dragosch writes that “Both crypto asset sentiment and cross-asset sentiment are currently bullish decisively,” noting that Bitcoin's rise back above $110,000 brings it within two percent of the recent all-time high of nearly $112,000 set in May.

On-chain data remains constructive. Exchange reserves have dropped to 2.91 million BTC—about 14.6 percent of circulating supply—after whales withdrew approximately 390,632 BTC last week. At the same time, net outflows from exchanges have slowed to around $0.53 billion from $1.78 billion the previous week, indicating lighter profit-taking pressure.

The derivatives position reflects the resilience of the spot market. The total Bitcoin futures open interest rose by an additional 2,200 BTC across venues, while the CME branch increased by 6,400 BTC. The funding rate for perpetual swap contracts remains broadly positive despite turning negative in some parts over the weekend, and the three-month annualized basis holds at around 6.3 percent.

In options, open interest rose by an additional 27,300 BTC, with the put-to-call ratio steady at 0.55; the one-month 25 delta skew remains modestly negative, implying continued demand for downside risk hedges even as actual volatility has dipped to 28.2 percent.

Institutional inflows are reinforcing the bullish trend. Global cryptocurrency ETPs absorbed $488.5 million last week, of which $254.9 million flowed into Bitcoin products. U.S. spot Bitcoin ETFs led with $525 million in inflows, balanced by a weekly leak of $24.1 million from the Grayscale Bitcoin Trust.

Bitwise's own BITB tool has attracted $78.1 million, while the company's European physical Bitcoin ETP (BTCE) only saw negligible outflows. Ethereum products have also enjoyed a net inflow of $260.9 million, maintaining a broadly risky bid price.

Bitwise acknowledges that headline risk could still trigger a sharp, short-term drop—the spat last week between Elon Musk and President Donald Trump briefly pushed BTC back to $100,000—but sees structural forces leaning heavily toward the upside. Dragosch writes that “U.S. economic policy uncertainty has likely peaked and continues to decline at the margin,” pointing to non-farm payroll growth of 139,000 in May and the adjustment in the recession rate.

With Bitcoin outperforming traditional assets this year and cross-asset sentiment now confirmed by Bitwise's indicators, analysts argue that the market is beginning to price the asset less as a speculative vehicle and more as a macro hedge. Whether traders accept a fair value of $230,000 depends on similar variables highlighted in the notes—country risk premiums, policy uncertainty, and the pace of institutional adoption—but they say the fundamentals can be seen on-chain, on the desk, and in traffic data.

“Bitcoin has also reclaimed $110,000 and is nearing its previous all-time high,” the report reminds readers. For Bitwise, that close level is not an endpoint but a staging area: they conclude that the intrinsic value of this currency asset lies “considerably further north.”